On March 1, 2020, the revised "Securities Law of the People's Republic of China" (hereinafter referred to as "Securities Law") formally came into effect, marking that the capital market has officially entered a brand new cycle. The "Securities Law" revision lasted more than four years and finally completed the "overhaul" after four deliberations by the Standing Committee of the National People's Congress. At the same time, this revision is also the most important revision of my country's "Securities Law" over the past 20 years. Laws, raising the cost of securities violations, improving the investor protection system, and establishing a sound multi-level capital market system are of great significance and far-reaching impact. Among them, information disclosure and investor protection are published as separate chapters, which is also one of the core contents of this revision of the Securities Law.

        In the information disclosure chapter, the core revised:

      (1) In the principle requirements for information disclosure, on the basis of truthfulness, accuracy, completeness, timeliness, fairness, etc., a new requirement of “concise, clear, and easy to understand” has been added, which is investor-oriented and reduces excessive redundancy and Incomprehensible information creates obstacles for investors to read the announcement;

      (2) Information disclosed both at home and abroad and securities are publicly issued and traded at the same time at home and abroad, the information disclosed abroad should be disclosed at the same time in the country;

      (3) For the first time, it is clear that "disclose to all investors at the same time", and once again emphasized and consolidated the fairness of the letter;

      (4) The penalties for violations of the letter and disclosure regulations have been increased. Compared with the original Securities Law**, the fine was 600,000 yuan. This revision will significantly increase the amount of fines, which will play a more powerful deterrent effect on illegal information disclosure;

      (5) The information disclosure channels have been broadened, and it has been further clarified that listed companies shall publish information disclosed in accordance with the law on the websites of securities trading venues and media that meet the requirements of the securities regulatory authority of the State Council. Internet channels have been added to allow investors to access announcements more timely and Convenient.

        Investor protection is the top priority in the work of the capital market and is inseparable from the promotion of corporate financing. It is necessary to seek a state of ** balance through institutional constraints. In 2015, when the 14th meeting of the Standing Committee of the 12th National People's Congress reviewed the draft amendments to the Securities Law, it was pointed out that the amendments to the Securities Law should be problem-oriented. The “Investor Protection” chapter of the “Securities Law” after this revision stipulates many investor protection systems, including investor suitability system, cash dividend promotion system, shareholder rights collection system, bondholder meetings and bond trustees System, advance compensation system, securities civil compensation group litigation, support litigation, mediation system emphasizing securities disputes, etc. This amendment takes "strengthening investor protection" as the fundamental purpose and mission of legislation and amendments to further improve the investor's legal rights protection system, and greatly improves the protection of the legal rights of investors, especially small and medium investors.

        Information disclosure and investor relationship management are important tools for listed companies to regulate their operations in the capital market. First of all, effectively safeguarding the legitimate rights and interests of investors is a prerequisite for all work. For many years, Yunnan Baiyao has strictly implemented various codes of conduct to ensure that information disclosure is true, accurate, complete, timely and fair; in addition, it uses communications, research, and Multi-dimensional channels such as interviews, visits, product experience, etc., strive to build a three-dimensional communication platform for investors, actively convey the company's cultural connotation, operating conditions, and strategic orientation, and continue to enhance investors' confidence in the company.

        On June 28, 2019, the Shenzhen Stock Exchange issued the "Announcement on the Evaluation Results of Information Disclosure of Listed Companies on the Shenzhen Main Board in 2018". The evaluation result of Yunnan Baiyao was A. The company's information disclosure work has always maintained a high standard and standardization for a long time. Running. In the past two years, the company has continued to optimize the allocation of resources for investor relations management and comprehensively enhance the protection of investors’ rights and interests. Since 2018, it has received nearly 600 people from nearly 30 batches of domestic and foreign investors, and disclosed more than 50 investor research materials in a timely manner , Participated in dozens of UBS, China Merchants, Southwest and other strategic meetings, received more than 200 investors and medical researchers, organized more than 10 activities to enter listed companies, and provided smooth telephone consultation services to more than 2,000 investors. Provide a three-dimensional direct communication system for global Baiyao investors and shareholders. In 2019, the company's major decision-making issues were frequently introduced. In the 4 shareholders' meetings, the participation rate and approval rate of the majority of shareholders, especially small and medium shareholders, set a record high.

        In the future, we will continue to in-depth study the relevant laws, regulations and regulatory documents of the capital market, and continue to use "obsessive-compulsive disorder" to build a strong line of defense for information disclosure, and escort the company's standardized operations. At the same time, we will continue to build and maintain a more open and healthy relationship with investors, effectively safeguard the legitimate rights and interests of investors, strive to build a three-dimensional communication platform for investors, and continue to innovate and optimize the methods and models of investor relationship management in order to maintain Responsible for the company’s reputation, responsible for protecting the rights and interests of investors, and fully fulfilling the company’s solemn commitment and responsibility in the capital market.

——Yunnan Baiyao Group Co., Ltd.

                                         May 12, 2020